Small Is Beautiful: NTT Docomo Chips In To $19M Round In Femtocell Maker Ubiquisys

The boom in smartphone and tablet use is having a knock-on effect for companies that build technology to support those devices. One case in point is UK-based Ubiquisys, makers of femtocell equipment that lets carriers improve indoor cellular coverage by offloading traffic to broadband internet connections, which today announced that it has raised another $19 million in funding, bringing the total raised by the company up to $81 million.

This latest venture round features two new investors, Mobile Internet Capital and Nissay Capital. MIC is the investment vehicle of Japanese mobile giant NTT Docomo; while Nissay is the VC arm of the Nippon Life Insurance Company. Existing investors Accel Partners, Advent Venture Partners, Atlas Venture, 5CCG/Sallfort Privatbank AG (which led this round) and Yasuda also participated.

Ubiquisys — which uses technology from Texas Instruments, Broadcom and Intel in its femtocell devices — has been one of the bigger beneficiaries of the trend among mobile carriers to improve indoor coverage. The company sells femtocells to 70 carriers worldwide, with some of the named customers including Hutchison’s 3 in the UK, Docomo competitor Softbank in Japan and SFR in France.

Femtocells have been growing in ubiquity over the last few years as mobile usage has boomed.

Carriers deploy femtos in public places for competitive advantage over other carriers — Ubiquisys says that it has shipped 50,000 public small cells to date. These support 3G, LTE and WiFi, it says.

Alternatively, Carriers also they sell femtocells as an extra paid-for service for businesses and home users — giving them, for the first time, a credible way to convince users to cut out fixed line connections altogether and push everything on to cellular plans.

Ubiquisys says it will use the funding to expand its business more generally, but specifically also to put more development into its public small cell hotspot business. One area that will likely see more of a push will be the “smart” cell Ubiquisys is developing with Intel. This new device, it says, “moves rich content, cloud applications and core networking capabilities” to the edge of the network, effectively speeding up how that content can be consumed by mobile users.

The company has raised a lot of money to date, and as with many late-stage raises aimed at expanding business development, part of it is to make sure that others in this space like ip.access and Mindspeed do not corner the market instead.

“We see more and more operators across the world focus on small cells. I believe the CTO at Vodafone said recently that by 2014 he could not forsee putting much more in the way of macro networks in place; it was all going to be driven by small cells. AT&T has a similar vision,” Ubiquisys’ CFO Fraser Park told the WSJ. “Frankly, if we failed to capitalize on the opportunities we would deserve to be be taken out and shot.”